KY resident working in OH

No, the Ohio local taxes are not a credit on the KY state return.  And, because Ohio and KY are reciprocal states, they have an agreement that when you work in one and live in the other, you are only taxed where you live.  If Ohio state taxes were withheld, you will file an Ohio nonresident reciprocal return to get these taxes returned to you.  However, Kentucky is taxing all of your income.  Because of the reciprocal agreement, you will not need the credit for tax paid in Ohio because you will get all of that back.  Local taxes are not a part of the reciprocal agreement, and KY localities only tax you when you work in that locality, so there is no credit to claim for your Ohio local taxes.

You may fill out a form with your employer so that they withhold KY and not OH tax.  Please see the following FAQ for more information on this:  https://ttlc.intuit.com/replies/4776822

Thanks for your reply. So when filing my State taxes on TurboTax, I have filed as a non-resident of Ohio AND as a resident of Kentucky. Is that correct? I have not filled out any exemption form and I assume it is too late to do so for this tax filing year?

For Ohio, there should be an option of a reciprocal return.  A regular non-resident return will not return all of the Ohio state tax.  The form is too late for the 2016 year, but you'll want to do it for 2017 if you still work in Ohio.

Okay, thanks. I guess I'm still not sure why I owe so much in Kentucky this year. Is it because I did not fill out the exemption form? It's hard to tell exactly on Turbo Tax since I can't see an itemized description of the taxes I'm paying on. I was speaking with someone who was supposed to connect me to a tax advisor but then the call got disconnected so it looks like I own't hear from anyone anytime soon via phone.

That's exactly why you owe so much to KY, yes.  Since you live in KY, KY taxes you on everything.  That's why you need to get back all of the OH tax.  The bad news is that KY has a higher tax rate than Ohio, which is another reason you want to fill out that form immediately so that you don't face quite as bad of a situation next year also.

Thank you, TurboTaxDanielV! You've been very helpful.

It's our pleasure to assist.

I am a KY resident working in Ohio, KY and Indiana. My employee has local taxes paid per my W2 for an Ohio locality. How do I get that back if I am paying taxes in KY?

You will/should file a Non-resident return for Ohio which will encompass all taxes paid there including local taxes.  Normally, non-resident states will provide a credit to your resident state for taxes paid to that state.